Ramadan lethargy pervades Türkiye's polyolefin markets

Although sellers approached the market with modest increase targets in March, supported by limited import supply, PP and PE offers in Türkiye failed to rise significantly due to Ramadan lethargy. In most cases, resin producers scaled back their initial hike targets or offered stable prices with slight discounts on a monthly basis. A few players have already stated that they do not expect any price increases in April due to current market dynamics and added that prices may even see slight downward corrections if cost support fades.

Higher €/USD weighs on European PP offers

In late February, sell ideas from Saudi Arabian producers had neared $1100/ton for raffia and $1150/ton for fibre before weakening buying interest loomed large over the market. Indeed, more offers were confirmed near the lower ends of the market this week, with low-end prices hovering around $1050-1060/ton and $1110/ton CIF, respectively. Some fibre buyers said, “If we were to buy large amounts, we could obtain $1100/ton CIF.”

The rising €/USD parity, which approached 1.09 as Ukraine’s acceptance of a US-proposed month-long ceasefire bolstered investor confidence in the Eurozone’s economic stability, curbed the competitive power of European PPH offers against other duty-free origins. Yielding to the pressure, European PP fibre prices were revised down by €50/ton shortly after initially emerging with rollovers from last month.

Some sellers also pointed to a lack of momentum in PP copolymer injection markets, saying, “Their premium over PPH grades narrowed as thin demand kept price hikes in check this month.”

A large converter commented, “End-user demand has been mild at home amid the Ramadan lull, while high labor costs have weakened our competitive power in export markets. We believe that PP prices may stay close to prevailing levels, as buyers would not accept any hikes even if they decide to replenish some stocks after the Eid al-Fitr holiday.”

Import PE demand subsides compared to January and February    

Slowing activity compared to early Q1 challenged import PE suppliers as March negotiations with buyers continued this week. Yet, LDPE was underpinned by firm trends in Europe and India, as well as Petkim’s early-March hike. A player said, “LDPE achieved marginal increases in deals. Yet, demand for import cargoes slowed, with most buyers preferring to meet their limited needs from the domestic producer, Petkim.”

A source from a Middle Eastern producer affirmed, “Import PE demand has been weaker than we expected so far. This is probably because consumers made large purchases in January and February for Ramadan preparations. April may see deals roll over while recently lower upstream chain may provide margin relief for resin producers.”

Despite initial targets of $30-40/ton increases, transactions indicated rollovers to $10-20/ton gains month over month for LLDPE and HDPE film in March.

HDPE feels pressure more profoundly than other PE grades
   
Meanwhile, multiple suppliers agreed that HDPE demand has been the weakest among all grades. “Our HDPE sales lagged behind LLDPE this month, while competitive Iranian offers, along with market talk of competitive US offers for later shipments, kept buyers cautious,” a source admitted.

American HDPE inj. and blow moulding prices were talked at a competitive level of around $950/ton CIF in H1 March although these offers were not widely confirmed and were deemed as spot cases.

Volatile oil clouds early April projections

Brent oil futures broke below the $70/bbl mark earlier in March, causing jitters among PP and PE players about potentially fading cost support. Although they pared some of their previous losses toward the end of this week, the volatility keeps players on their toes. Another factor to watch is the rising €/USD currency, as it may continue to curb the competitive power of European PP and PE offers in the coming term.

A source from a global polyolefin supplier did not rule out the possibility of price corrections next month. He said, “Demand in Europe has not been bright ahead of the Easter holiday, while the next olefin contracts may settle lower due to weak naphtha. As a spillover effect, we think it may be hard to keep Türkiye’s import markets steady in April. The potential arrivals of earlier cargoes have already led to softer expectations among buyers.”